Agency conflicts, investment, and asset pricing
By: Rui Albuquerque, Neng Wang
Contributors: Wang, Neng; National Bureau of Economic Research
Series: NBER working paper series -- working paper 13251; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13251.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "The separation of ownership and control allows controlling shareholders to pursue private benefits.  We develop an analytically tractable dynamic stochastic general equilibrium model to study asset pricing and welfare implications of imperfect investor protection.  Consistent with empirical evidence, the model predicts that countries with weaker investor protection have more incentives to overinvest, lower Tobin's q, higher return volatility, larger risk premium, and higher interest rate.  Calibrating the model to the Korean economy reveals that perfecting investor protection increases the stock market's value by 22 percent, a gain for which outside shareholders are willing to pay 11 percent of their capital stock"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 8/13/2007.

Includes bibliographical references.

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